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TMI Blog2012 (10) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of hearing argued that expenditure incurred on catalyst as capital expenditure co-relate with the expenditure of machinery spares etc, which requires consideration under the proviso. Needless to mention that the CIT (Appeal) Lucknow in its order dated 22.3.2007 observed that to quote, “Furthermore the extent to which such spares & catalysts were utilized year to year, or were carried forward is unspecified. Yearly consumption and the circumstances leading them to be declared obsolete is not brought on record. Nor the manner in which the inventory is accounted. There is no sound logic for keeping catalysts ammonia etc. for so many years without use/disposal. The entire claim is without evidence. Catalysts & spares are specialized items and the writing off of such items after 18-5 years is irrational.” Thus, there is co-relation with the issue pertaining to the catalyst and spares. Now the proposed portion pertaining to spares may be admitted. Argument advanced that power may be exercised during the course of hearing carries weight. As per the proviso of sub-section 4 of Section 260 A High Court has got ample power to frame new or additional substantial question of law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Income Tax Appellate Tribunal is justified in holding the cost of machinery spares as revenue expenditure purchased admittedly in the period 1985-86 to 2000-01 and capitalized in a single assessment year. Being satisfied with the argument advanced by the appellant, when we proceeded to dictate the order to frame another substantial question of law, Shri J.D.Mistri learned Senior Counsel, representing the respondents- assessee submitted that he wants to cite certain case laws in support of his argument to the effect that no additional substantial question of law can be framed at later stage. The order dated 15.9.2011 is reproduced as under:- 1.Heard Sri D.D. Chopra, learned counsel for the appellant and Sri J.D. Mistri, learned Senior Counsel assisted by Sri Akarsh Garg on behalf of the respondent. 2. To substitute in place of respondent Indo Gulf Fertilizer Limited, the appellant prays for time to move application for impleadment. However, learned Senior Counsel for the respondent Sri J.D. Mistri, assisted by Sri Akarsh Garg, submits that he has no objection in case appellant substitutes Aditya Birla Novo Limited in place of respondent. 3. Accordingly, the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y case, it shall formulate that question. (4) The appeal shall be heard only on the question so formulated, and the respondents shall at the hearing of the appeal, be allowed to argue that the case does not involve such question : Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the Court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question. (5) The High Court shall decide the question of law so formulated and deliver such judgment thereon containing the grounds on which such decision is founded and may award such cost as it deems fit. (6) The High Court may determine any issue which - (a) Has not been determined by the Appellate Tribunal : or (b) Has been wrongly determined by the Appellate Tribunal, by reason of a decision on such question of law as is referred to in sub-section (1). (7) Save as otherwise provided in this Act, the provisions of the Code of Civil Procedure, 1908 (5 of 1908), relating to appeals to the High Court shall, as far as may be, apply in the case of appeals under this section." 6.A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the date of establishment of the National Tax Tribunal], if the High Court is satisfied that the case involves a substantial question of law. (2) [The Chief Commissioner or the Commissioner or an assessee aggrieved by any order passed by the Appellate Tribunal may file an appeal to the High Court and such appeal under this sub- section shall be- (a) filed within one hundred and twenty days from the date on which the order appealed against is [received by the assessee or the Chief Commissioner or Commissioner]; [6] (b) [***] (c) In the form of a memorandum of appeal precisely stating therein the substantial question of law involved. [(2A) The High Court may admit an appeal after the expiry of the period of one hundred and twenty days referred to in clause (a) of sub-section (2), if it is satisfied that there was sufficient cause for not filing the same within that period.] (3) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question. (4) The appeal shall be heard only on the question so formulated, and the respondents shall at the hearing of the appeal, be allowed to argue that the case does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itional substantial question of law unless they are in the mid of hearing. He submits that framing of additional question of law would amount to review of order dated 20.4.2010 (supra) which is not permissible. The further submission of the learned Senior counsel is that since out of three questions framed by the appellant only two have been accepted and the third one shall deemed to be rejected. Hence, it cannot be a ground to frame additional question by de novo hearing. Once rejected then it amount to rejection for all time to come. He further submits that proviso cannot enlarge the main provision and court lacks jurisdiction to frame additional question. During the course of hearing when a question was raised to him by the court that how he define the word 'satisfaction' used in the proviso of sub-section 4 of Section 260 A, he submits that it is not necessary to look into it since he is questioning the jurisdiction of the court to frame additional substantial question of law on the basis of same pleading. 7. Learned Senior counsel relied upon a case decided on 15.12.1976 by Orissa High Court, Commissioner of Income-Tax Vs. Biju Patnaik reported in 1978 ITR 555 and 1993 (38) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of law for the reasons recorded if satisfied and feels that such substantial question of law involves. REVIEW 12. It is incorrect to say that framing of another substantial question of law shall amount to review of order dated 20.4.2010. Argument seems to be misconceived. In Black's Law Dictionary word review has been defined as under:- Review 1. Consideration, inspection, or reexamination of a subject or thing. 2. Plenary power to direct and instruct an agent or subordinate, including the right to remand, modify, or vacate any action by the agent or subordinate, or to act directly in place of the agent or subordinate Subject to the Assembly's review, the Council enjoys the same powers of review and delegation as the Assembly. 13. In The Law Lexicon by P. Ramanatha Aiyar, 2nd Edition 2009; word review has been defined as under:- review--A review is a proceeding which exists by virtue of statue. It is in its nature a new trial of the issue previously tried between the parties, the cause of action being brought into court again for trail by a new petition. The proceedings in some respects resembles a writ of error, and also a new trial. The process und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence which, after the exercise of due diligence, was not within his knowledge or could not be produced by him at the time when the decree was passed or order made, 6r on account of some mistake or error apparent on the face of the record, or for any other sufficient reason, desires to obtain a review of the decree passed or order made against him, may apply for a review of judgment to the Court which passed the decree or made the order. (2) A party who is not appealing from a decree or order may apply for a review of judgment notwithstanding the pendency of an appeal by some other party except where the ground of such appeal is common to the applicant and the appellant, or when, being respondent, he can present to the Appellate Court the case on which he applies for the review. [ Explanation : The fact that the decision on a question of law on which the judgment of the court is based has been reversed or modified by the subsequent decision of a superior court in any other case, shall not be a ground for the review of such judgment.] HIGH COURT AMENDMENTS Kerala.- In Order XLVII, in rule 1, in sub-rule (1),in clause (c), for the words court of small causes, subst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ositively by 'deeming something be what it is not or negatively by 'deeming' something not to be what it is...All other uses of the word should be avoided....Phrases like' if he deems fit' or 'as he deems necessary' or nothing in this Act shall be deemed to...'are objectionable as necessary deviations from common language. 'Thinks' or 'considers' are preferable in the first two examples and 'construed' or 'interpreted' in the third...Deeming' creates an artificiality and artificiality should not be resorted to if it can be avoided. G.C. Thornton, Legislative Drafting 99 (4th ed. 1996) 20. The word 'deemed' is frequently used in law to create a legal fiction which means for the purpose of respective law, what is deemed to be, must be regarded as being in fact also. 21. Hon'ble Supreme Court in the case reported in AIR 1954 SC 155 Income Tax Commissioner vs. Bhogilal Laherchand while interpreting Section 4 of the Income Tax Act held that the term 'deemed' brings within the act of chargeability income not actually accruing but which is supposed notionally to have accrued. 22. In AIR 1959 SC 763 Income Tax, West Bengal vs. Calcutta Stock Exchange Association, their Lordships he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n provision as contained in sub-section 4 seems also to be misconceived argument. Once the proviso itself empowers the court to formulate another substantial question of law or new substantial question of law, in case, it is satisfied and power vested in court cannot be abridged away because of subsection 4 section 260 A, such argument seems to be not sustainable. Language of the proviso as well as entire Section 260 A does not suffer from any ambiguity. 31. Accepting the argument of Shri J.D.Mistri will amount to apply the principle of reading down or supply causus omissus. Causus Omisus/principle of reading down in a provision; ordinarily should not be supplied by judicial interpretative process, in language used in a provision is clear. Court cannot read anything into a statutory provision or rewrite a provision which is plain and unambiguous vide 2003 (6) SCC 516, Union of India Vs. Rajiv Kumar (para 18).The same principle has been reiterated in the cases reported in 2006 (2) SCC 670, Vemareddy Kumaraswamy Reddy and another VS. State of A.P.; (2004) 11 SCC 625, Delhi Financial Corporation and others Vs. Rajeev Anand and others; AIR 1953 SC 148, Nalinakhya Bysacik Vs. Shyam Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , during the course of hearing attention is invited by the appellant or the assessee with regard to certain important substantial question of law which has not been taken into account or escaped or has not been formulated for any other just reason court is vested with power to correct itself and formulate new or additional substantial question of law in case it is satisfied. Needless to say that power conferred to the court is judicious power and discretion should be exercised cautiously and judiciously after assigning reasons in terms of the proviso of subsection 4 of Section 260 A of the Act. 38. In The Major Law Lexicon, 4th Edition 2010, by P. Ramantha Aiyar, the meaning of word satisfaction on the basis of different pronouncement of the courts has been defined as under:- Satisfaction only means that 'he must be in fact satisfied' and not a dishonest satisfaction, which will be no satisfaction at all.--S.3 U.P. Maintenance of Public Order (Temporary) Act (4 of 1947), Durgadass Vs. Rex, AIR 1949 All 148 (FB) Satisfied. 'Satisfied is a neutral word with a wide range of meanings covering the criminal burden of proof (Satisfied to be sure) through the civil burden of proo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eans, simply makes up it mind. 1977 Tax LR 1921 (DB) (Del). 39. In view of above, keeping in view the meaning of word satisfaction or satisfied , after assigning reason court may formulate new substantial question of law, if it is necessary under the peculiar facts and circumstances of particular case after assigning reason. 40. Non-exercise of discretion by the court may be resulted into miscarriage of justice, hence, submission of learned Senior counsel that court lacks jurisdiction, seems to be not correct. 41. In the case of Helios and Metheson Information technology (supra) during the course of arguments when it was felt that some substantial question of law could not be formulated originally, the Madras High Court opined that it may formulate new substantial question of law, to quote relevant portion:- That apart, under section 260A of the Act, the proviso to sub-section (4) specifically provides that nothing in the sub-section should be deemed to take away or abridge the power of the court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is specified that the case involves suxh question. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of fact may give rise to a substantial question of law, inter alia, in the event the findings are based on no evidence and/or while arriving at the said finding, relevant admissible evidence has not been taken into consideration or inadmissible evidence has been taken into consideration or legal principles have not been applied in appreciating the evidence, or when the evidence has been misread. (See Madan Lal Vs. Gopi, Narendra Gopal Vidyarthi Vs. Rajat Vidyarthi, Commr. of Customs Vs. Vijay Dasharath Patel Metroark Ltd. Vs. CCE and W.B. Electricity Regulatory Commission Vs. CESC Ltd.) 46. As observed (supra) there may be a situation when court fails to take notice of substantial question of law formulated by the appellant at the time of admission of appeal or during the course of hearing court may arrive to the conclusion that under the pleading on record and the factual matrix of the case it is necessary to frame additional substantial question of law, court may formulate new questions. Since, proviso of sub-section 4 of section 260 A of the Act provides that it shall not deem to take away or abridge the power of the court to hear for the reasons to be recorded the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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